Railroads scrap merger talks

(Bloomberg) — Canadian Pacific Railway Ltd. said exploratory talks about a possible merger with CSX Corp. ended and no further conversations are planned.

Canadian Pacific, based in Calgary, said today that an integrated coast-to-coast combination would have improved customer service, promoted competition and alleviated congestion in North America — specifically the key Chicago gateway.

CSX, the biggest railroad in the eastern U.S., rejected an offer by Canadian Pacific to combine into a transcontinental railroad, people familiar with the matter said earlier this month. CSX CEO Michael Ward said last week that rail consolidation could create disruptions in freight traffic, and U.S. regulators would be “very concerned” by the merger.

While regulatory concerns may be a major deterrent for many railroads considering combinations, getting approval is achievable “given the right structure between the right players,” Canadian Pacific said.